The digitizer may be defective.
You can try this process to see if there is any debris that is stuck under the screen edge.
Take a business card or folded piece of paper. Stick it in the gap between the edge of the screen and the case. Move around the perimeter of the screen and see if you can get out any debris.
If that doesn't work, the digitizer on the device is probably defective and needs replaced.
You can contact Palm for repair or find replacement parts at pdaparts.com or usedpdaparts.com
For reference purposes, click on the following link for the support page for your device on the kb.hpwebos.com webpage.
http://kb.hpwebos.com/wps/portal/kb/na/treo/t850/unlocked/home/page_en.html
There are links on the page to the user guide, troubleshooting, how to's, downloads, etc.
